After RBI's Rs 2,000 note recall, money exchanges in Gulf refuse Indian currency

Indian rupee
A man displays new 2000 Indian rupee banknotes after withdrawing them from a State Bank of India (SBI) branch in Kolkata, India, November 10, 2016. Reuters/Rupak De Chowdhuri/Files

After the Reserve Bank of India (RBI) decided to withdraw Rs 2,000 currency notes on May 19, Indian expatriates and tourists in the Gulf, including the UAE, are finding it tough to exchange the notes they hold.

This is because the money exchanges (foreign exchange dealers who convert the Indian rupee into local currency for a fee) are refusing to deal with the withdrawn currency.

Officials of various money exchange unions in Dubai told Onmanorama that they stopped accepting the currency because they fear that they would not be able to sell them. They are now instructing Indian tourists and expats to deposit them in their Indian bank accounts.

While Indians are feeling the pinch of RBI's decision in a foreign country, money exchangers said that none of the customers are willing to buy the Rs 2000 notes they hold.

Officials said that many foreign currency exchanges hold huge sums of Rs 2000 notes (which they accepted before the ban). They said they do not know what to do with them. "Now that the currency has been withdrawn, the exchange rate for these notes will be very low," said an official of Al Razouki Exchange in Dubai.

As soon as the RBI withdrew the Rs 2000 currency, exchanges in the UAE were reluctant to accept them.

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